Positive on Tata Steel: Vivek Mahajan, Aditya Birla Money

Vivek Mahajan, Head-Research, Aditya Birla Money, in a chat with ET Now gives his views on the matals space and gives his stock ideas.

What do you do with some of the metal counters? From a medium-term perspective, would you buy into the large cap metal stocks?

We continue to be bullish as far as the metals are concerned but it has to be stock specific. You have to stick with frontlines. Tata Steel and Sterlite are two stocks which come to mind immediately where we are positive. In mid-cap space, there is Usha Martin which has a potential to inch up by something like 40-50% from the current level.

Are there any particular themes that you can probably identify for us going forward into the next calendar year?

After whatever has happened in the last couple of weeks or last one month, we are seeing that the mid caps have been battered out of shape, particularly because of governance issue or it could be some operator linkage or price manipulation. As such, it is very important the investors should stick with quality, stick with the frontline stocks where there are no governance issues. If India story is to continue, the frontline will continue to attract the interest from the global investors and they will continue to grow at a rate which is much higher than the industry average.

As far as the FMCG space is concerned, we like stocks like ITC, Dabur and also Tata Global which we believe could be giving a return of anything in the excess of 20-25%. Bata is another stock which can be looked at on any correction. The stock should be giving a return of 25-30% in medium term.

As far as banking is concerned, in spite of whatever has happened, the economy cannot grow without banking moving in tandem with the economy. As far as the frontline stocks are concerned, stocks which have got high CASA deposit, stocks like Axis Bank, HDFC Bank and ICICI, look good. We are positive on HDFC Ltd as well. As far as mid-cap stocks in that space are concerned, Yes Bank is one stock which comes to mind and can be bought on any correction. In case you could buy this stock at sub-300 level, it could be a very good buy.

As far as auto is concerned, it should also continue to move up in next six months to one year’s time. Maruti is one stock, which you must have in one’s portfolio. It can be looked at on current level or on any correction. M&M again looks positive and in auto ancillary space, we are positive on Wabco TVS. We are positive on Sundram Fasteners and Exide can be accumulated on any corrections.